"We have spent almost $1000 on lessons only to come away being totally discouraged and frustrated because the moves were shown only once to us and we were expected to "KNOW" it. I feel like a total clutz and my husband (who wasn't really that interested in the first place) is convinced he's not going to try again."
Does the manager of the studio know your feelings? Were you stuck with this instructor? Did you have options of asking for a different instructor that is better suited for both of you. If I were spending that much money on lessons - I would certainly ask the manager/owner and express my concerns over the goals of you and your husband vs what you were getting from the instructor. Not everyone is alike. You as the consumer are a representative of the end result of the studio per se. Be it, social, group, competitive or individual dancing. It reads like you were mis-fit in terms of what you and your husband set out to learn about and the goals your instructor had for you. If any.
That said, in addition to all the great suggestions, check out your local parks and recreation programs. Many of the Parks programs are more suited for social dance in a variety of formats. For a small fee that will not break your wallet. Our experience was much like yours. We did a Parks and Recreation Program and ended up becoming friends with others in the program. Mostly all of us are grandparents or great-grandparents. And yes, it was ballroom - "know-nothing" level beginning. And the instructors tend to be much more life experienced with a great deal of patience. My husband really liked that program as he hated the studio setting. Also, many senior assisted living centers and senior citizen centers will offer seasonal group ballroom or CW 2-step or Salsa (the list can go on and on). It's not a necessity to go to an actual ballroom studio. It's all in what you want. It might help if you can video tape/camcord your lesson with your teacher. Ask the teacher first - since you and your husband will practice at home after the lesson. Most don't mind and many encourage it. Some studios don't allow video taping of private lessons or groups unless permission is sought first. As with DHEUN, my teacher also travels to his students (all above the age of 55) and he rents space near his students if they want to get the feeling of studio work rather than being in their homes (mainly for Waltz and Tango where they have room to move). None of his students compete and he makes sure that each couple is a private lesson without onlookers (making the husband or wife much more comfortable). They just like to dance with their husband/wife or significant other or get ready for that big wedding day party. You and your husband are not alone in the disappointment of the studio instructor you had. I'm pretty sure you can find someone recommended to you through friends, neighbors, family. Good luck, don't give up.